Pets.com goes belly up

Pets.com finally surrendered to the inevitable Tuesday when it announced that it was shutting down its operations and laying off 255 of its 320 employees.

Pets.com (Nasdaq: IPET) shares were up 6 cents to 72 cents in early afternoon trading.

The online pet supply store said it was shutting down because it was unable to find a purchaser or financial banker.

The company said it's going to sell the majority of its assets including its inventory, distribution center equipment, content and its sock puppet brand icon.

The top online pet retailer said efforts since early summer to raise capital or sell the company were unsuccessful. Of 50 prospects contacted for financing or to take over Pets.com, only 8 expressed any interest in visiting the firm, it said.

"It is well known that this is a very, very difficult environment for business to consumer Internet companies," said CEO Julie Wainwright in a prepared release. "With no better offers and avenues effectively exhausted, we felt that the best option was an orderly wind down with the objective to try to return something back to the shareholders."

In its latest quarter, Pets.com posted a loss of $21.7 million, or 68 cents a share, on sales of $9.4 million.

Before Tuesday's announcement, the company said it was on its way to total sales of more than $35 million for the fiscal year.

Pets.com shares moved up to a 52-week high of $14 a share in March before falling to a low of 44 cents a share earlier this month.

Ironically, the two analysts still covering the stock maintain a "buy" recommendation.

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